Breaking news!!! ”Van Rompuy bites dog!!!”

At this moment the home page of the European Council is all about the spring EUCO meeting 1 to 2 March 2012, with further pages dedicated to the re-election of president Herman Van Rompuy, the first day of the spring European Council, the euro area leaders on Greece, the Treaty on stability, coordination and governance (TSCG aka the fiscal compact) signed, and day two of the EUCO meeting summed up.

These summaries have links to documents, speeches and webcasts, so technically the communication effort was handled neatly. Under Meetings, I would prefer for the conclusions and the euro statement to link to the page with all the available language versions regardless of the language the visitor happens to use. The link to the TSCG offers an example.


EUCO summary

For the reader pressed for time, the EUCO conclusions begin with a summary of the results:

The European Council discussed the implementation of the EU's economic strategy. This strategy pursues both continued fiscal consolidation and determined action to boost growth and jobs; sustainable growth and jobs cannot be built on deficits and excessive debt levels. The measures taken to stabilize the situation in the euro area are bearing fruit.

The European Council endorsed the five priorities for 2012 set out in the Commission's Annual Growth Survey. It looked at action that has to be taken at national level. Member States must make faster progress towards the targets of the Europe 2020 Strategy and step up efforts on the reforms taken up in the 2011 Country-Specific Recommendations. They are expected to indicate the measures they intend to take to that effect in their National Reform Programmes and their Stability or Convergence Programmes. The European Council also discussed action required at the EU level, pushing ahead with completing the Single Market in all its aspects, both internal and external, and boosting innovation and research.

In the margins of the European Council the participating Member States signed the Treaty on stability, coordination and governance in the EMU.

The European Council set the EU's priorities for the forthcoming G20 meeting and UN Rio+20 Conference, with a particular emphasis on growth-enhancing measures and reforms. It took stock of developments concerning the Arab Spring and set guidance for future EU action to support that process.

The European Council granted candidate status to Serbia.

It agreed that the Council should revert to the issue of Bulgaria and Romania's accession to the Schengen area in order to adopt its decision in September.

Finally, the European Council re-elected Herman Van Rompuy as its President.

Herman Van Rompuy

One of the concrete decisions was the reappointment (formally election) of the EUCO president for two and a half years.

I already noted that president Herman Van Rompuy promised no real change for EU citizens during his second term, during which he will chair the Euro Summit as well. (A post in Swedish on Grahnblawg too about this election of a sole candidate.)

In addition to the draft conclusions (not formally published) and press conference videos, Van Rompuy left a number of speeches and statements as reading for journalists and aficionados of EU politics: his acceptance speech, his statement after the first session of the European Council with the letter S in prominence, his speech at the signing of the of the Treaty on Stability, Coordination
and Governance in the Economic and Monetary Union (TSCG) by 25 of the 27 EU member states, and his positive end note at the conclusion of the summit, even risking a joke about his own (s)election (in French).


Van Rompuy bites dog?

Those who cry out for boldness and charisma are probably driven to despair before Van Rompuy opens his mouth, and they possibly fall asleep before hearing a word.

If ”Man bites dog” encapsulates news, there is little front page headline material to wring out of these addresses.

The structure is clear and the style restrained. In a low key they put chosen policies in perspective and explain the choices made. Their lack of hyperbole makes them more credible than many EU proclamations of yore. The messages seem to be the kind of gentle prodding national leaders want, or at least tolerate.

Are Van Rompuy's interventions and work effective? Can the outcomes be judged now or later?



Ralf Grahn
speaker on EU affairs, especially digital policy and law


P.S. Between the global issues and the national level, with a tenuous hold on democracy, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Are you following the debates which matter for your future? Is your blog already listed on Bloggingportal?

European Council and Euro Summit: Van Rompuy promises more of the same

Habemus what? White smoke rose from the Justus Lipsius building. Without a black ball, both a cabal of 27 and a coterie of 17 political leaders in Europe made it clear that they want more of the same.

Late and almost imperceptibly the selection of Herman Van Rompuy to chair the Euro Summit coterie and the European Council for the next two and a half years had been introduced into the meagre advance information from EUCO to the public.

The selection of Van Rompuy to chair both clubs from 1 June 2012 to 30 November 2014 has now been confirmed.

In his acceptance speech Van Rompuy reminded his backers that ”our duty is to preserve the trust of the citizens in the Union”.

It would have been even better, if he had remembered that we are citizens of the European Union (even if we still lack full political rights).

Can we hope for better governance and more openness? Van Rompuy's thank-you address seems to dash any hope of improvement: ”In my second mandate, I intend to remain true to my style and working methods.”

Despite this, Van Rompuys audaciously speaks about winning over the hearts and minds of the Europeans.

How about democratic reform of the European Union and its institutions? For Van Rompuy democracy becomes a value worth effort right beyond the external border of the EU:

Without exaggerating the means at our disposal, we must act united whenever our interests and our values -- in particular democratic values -- are at stake, in the first place in our neighbourhood. This is where our credibility starts.

In addition, president Van Rompuy reported about the discussions at the first EUCO session. True to his style and working methods, he still did not share the paper he had circulated to the heads of state or government on how to revive growth and employment.

Update 7 March 2012: Through Twitter the Council press office yesterday made an Issues Paper (29 February 2012) available to the public.

Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. With a sometimes tenuous hold on democracy, between the global issues and the national level, the European Union institutions and the eurozone coteries shape our future. At the same time we see a European online public sphere emerging. Grahnlaw (ranked fourth among politcal blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish) are among the more than 900 euroblogs aggregated by multilingual Bloggingportal.eu. Is your blog already listed among them? Are you following the debates which matter for your future?

The European Council in 2011 (publication)

The Treaty of Lisbon, which entered into force on 1 December 2009, made the European Council (EUCO) an official institution of the European Union. It consists of the head of state or government of each member state of the EU, as well as without a vote, the president of the European Commission (José Manuel Barroso) and the EUCO president elected for two and a half years by the 27 national leaders (Herman Van Rompuy).

The first two years of the European Council have coincided with the profound financial and economic crises in the eurozone and the European Union generally, leading to repeated summits of varying kinds.

For the second time, president Van Rompuy has put a summary of his thoughts on record in an annual publication, now:

The European Council in 2011 (January 2012; 74 pages)

This is not a novelty, because the English and a few other versions were published in January.

There are, however, a few reasons for me to mention – even to recommend – the publication now.

I have now read the overview presented by Van Rompuy. His ”official” account of history in the making is an important source, regardless of how readers feel about the subject and the success this far.

The publication has now become available in 22 EU languages. (You can either toggle the language switch for the language of your choice, or proceed to the page for Council publications.)

The third reason is that you are able to find the official EUCO conclusions and the extraordinary summit statements neatly in one place for future reference.

The introduction and the conclusions are available in the same manner for the previous year, in:

The European Council in 2010 (January 2010; 45 pages; also available in 22 languages)



Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. 1: For better or for worse, between the global issues and the national level, the European Union shapes our digital future and online freedoms. More than 900 euroblogs are aggregated by multilingual Bloggingportal.eu. Is your blog already listed among them? Are you following the debates which matter for your future?

P.S. 2: A few moments ago, the petition launched by @Avaaz for the European Parliament (and the national parliaments) to reject #ACTA had already been signed by 2,377,656 netizens, but more are welcome until the official funeral of the anti-piracy treaty.

New ”fiscal compact” for eurozone (2 x updated)

How can anyone defend (or even call for more) intergovernmental solutions to common problems at the European level, or even tolerate the EU our leaders and their predecessors have built?

With democratic government and sufficient powers the European Union, the eurozone and we would not be in this impotent mess.

Well, upon leaving Mario Draghi, the president of the European Central Bank (ECB) called it a very good outcome for the euro area countries, although the deal has to be fleshed out in the coming days.

The European Council dinner finally broke up and after 5 o'clock Friday morning (local time) the announced press conference of European Council and Euro Summit president Herman Van Rompuy and Commission president José Manuel Barroso took place.

Update 9 December 2011: Herman Van Rompuy's written statement has now been posted, and it offers more detail.

Update 2, 9 December 2011: Statement by the euro area heads of state or government (9 December 2011; 7 pages). This is the paper to read, both for actions and blank spaces.

A ”new fiscal compact” is the novel Sesame between 17 eurozone members and six others, an intergovernmental agreement between 23 member states (perhaps more).

Self-imposed structural weaknesses force the leaders to continue on the road of intergovernmentalism, although credible and sustainable solutions need durable and legitimate foundations.

The United Kingdom is clearly a problem, not a part of the solution, as shown by the Financial Times report on prime minister David Cameron's demands for Britain to be able to be excepted from regulation of a crucial part of the internal market, financial services.

Thus, Cameron wants to undermine the integrity of the internal market.



Ralf Grahn

European Council: competing agendas

The heads of state or government meet in the European Council today in a weird atmosphere. The two largest ”shareholders”, Angela Merkel and Nicolas Sarkozy (Merkozy) have ganged up to sort out their internal differences and to impose their solution on the rest of the participants, leading to much discussion.

Then we have the formal (provisional) agenda, written by the president Herman Van Rompuy, the man who was mandated by all the leaders to produce a report on stronger economic union. This he did, although the public had to rely on leaks to get access.

With the Merkel & Sarkozy letter on the one hand, and the Van Rompuy report on the other, the meeting looks set to start with two competing agendas (in a wider sense).

Would credible, accountable and democratic government look like this?

If this is how it starts, how will it end?



Ralf Grahn

Merkozy euro proposals face EU members and Standard & Poor's

Even if the web is overflowing with reports and comments on the Merkozy proposals, there is cause to record the primary sources from the last two days.


Paris

The German chancellor Angela Merkel met the French president Nicolas Sarkozy at the Elysée Palace in Paris Monday, 5 December 2011. The Elysée web pages offer a video recording of the press conference (with French voice-over for Merkel) and a French transcript on the same page:

Conférence de presse conjointe : Mme Angela Merkel et M. Nicolas Sarkozy

The detailed proposals will be presented in a letter to president Herman Van Rompuy Wednesday, and subsequently published. They want a new Treaty, preferably among the 27, but between the 17 eurozone countries and open for others if needed, Sarkozy said before outlining the six proposals to be detailed in the letter.

Sarkozy sees that Franco-German unity leads towards a Europe of governments. Eurobonds are no solution to the problems.

According to Merkel, mandatory (golden) budget balance rules are needed, which can be verified by the Court of Justice of the European Union in order to make the governments respect their engagements regarding the stability and growth pact. The desired changes cannot be made without Treaty change.

Merkel described the monthly Euro Summits as thematic meetings dedicated to growth issues - labour law, innovation, development of infrastructure – in a spirit of convergence and competitiveness.

The leaders want clarity in principle during the European Council Thursday and Friday, and the conclusion of the Treaty amendments in March 2012.

The leaders dedicated a joint statement to the credit rating agency Standard and Poor's (in French and English):

Communiqué conjoint franco-allemand


Berlin

The German chancellery offers a web page with the six proposals outlined:

Strategie zur Überwindung der Staatsschuldenkrise

Germany has now reinstated ”economic government” (Wirtschaftsregierung) to describe the monthly Euro Summits.

The German transcript of the joint press conference:

Pressestatements von Bundeskanzlerin Angela Merkel und dem französischen Staatspräsidenten Nicolas Sarkozy (5 December 2011)

The recent German government policy statement:

Regierungserklärung: Ziele und Leitlinien für den Europäischen Rat (2 December 2011)

The technical decision of the eurozone finance ministers to expand the the European Financial Stability Facility (EFSF) through leverage:

EFSF: Maximierung beschlossen (30 November 2011)


Brussels

The president of the European Council and of the Euro Summits, Herman Van Rompuy, has invited the heads of state or government. His invitation letter 6 December 2011, a day after the meeting between Merkel and Sarkozy, refers to draft conclusions prepared on the basis of his interim report, unpublished.


Intergovernmental Europe

Above we saw the state of main sources for the public, news reports and opinion: an outline of the unfinished the Franco-German proposals and the unpublished interim report by Van Rompuy.

Intergovernmental Europe remains true to its role as an underachiever with regard to democratic rule, good governance and transparency at the European level. The citizens of the EU are promised even more intergovernmentalism in the future, instead of credible, accountable and democratic government.


Standard & Poor's

However, one essential piece we have to add is the flurry of negative assessments from the credit rating agency Standard & Poor's between 5 and 6 December 2011 for eurozone sovereign debt and the EFSF. Since there are several announcements and new developments are possible, I link to the thematic page:

European Sovereign Ratings and Related Material

For those in a hurry the synthesis announcement offers the main picture. It promises a review based on the upcoming European Council 8 to 9 December 2011, with possible downgrades of one notch for the strongest governments and eventually two for the rest:

Standard & Poor's Puts Ratings On Eurozone Sovereigns On CreditWatch With Negative Implications (5 December 2011)

***

I have put the eurozone on democracy watch, with negative implications.



Ralf Grahn

Euro: Waiting for Merkozy

Heads of government (or state) in most European capitals may think about Samuel Beckett, as they wait for Merkozy.

At least publicly their common president of the European Council and the Euro Summits, Herman Van Rompuy, has not published proposals to overcome the euro crisis.

More than anything, we seem to experience a cacaphony of silence from the national capitals and Brussels.


Franco-German positions

Monday, 5 December 2011 at 13:30, the French president Nicolas Sarkozy receives the German chancellor Angela Merkel for a working lunch at the Elysee Palace.

What, if anything, are they going to bring to the table?

Friday, 2 December 2011 the German Parliament (Bundestag) heard and debated the government policy statement presented by chancellor Angela Merkel (Regierungserklärung durch die Bundeskanzlerin zum Europäischen Rat am 9. Dezember 2011 in Brüssel).

The Toulon election rally speech by the French president Nicolas Sarkozy and the government statement by Merkel have been widely reported and commented. Here are a few attempts to compare the two messages, ahead of the meeting between Sarkozy and Merkel in Paris tomorrow, 5 December 2011.

Charlemagne published two blog posts on the common euro problem, but two differing visions (part I and a more detailed comparison in part II).

On the Coulisses de Bruxelles blog, Jean Quatremer discussed similarities and differences. The European Council may continue until Sunday.

Le Figaro offers another synthesis of the Franco-German views.


Bystanders

In addition to David Cameron and Herman Van Rompuy the list of bystanders ahead of the European Council (#EUCO on Twitter) 8 to 9 December 2011 seems long, with few exceptions to date.

One of the few government sources I have stumbled across is the Swedish foreign minister and euroblogger Carl Bildt, whose message is more Europe, but not more Europes. Splitting Europe into new groups is not the way forward.

Ahead of the General Affairs Council (GAC) 5 December 2011 the Swedish government is positive about the need for improved budgetary discipline, but reserved about the need for treaty changes. The customary annotated agenda offers some background, but no concrete proposals.

The Swedes may be happy to be outside the eurozone right now, as The Economist reports, but how realistic is Bildt's hope to evade the consequences of being a euro outsider by reaching effective decisions unanimously and then ratifying them in 27 EU member states?

The government of Finland refers to president Herman Van Rompuy's proposals on ways to strengthen the economic union, improve fiscal discipline and deepen the euro area's integration. The debate will concentrate on the possibility of limited Treaty changes or corresponding arrangements. The President’s proposals are based on the mandate he was given in the October meeting.

This text and one about the General Affairs Council are written as if Van Rompuy's proposals existed (and only the public was kept in the dark).

The Irish Independent sees prime minister Enda Kenny capitulating to Merkel on budget rules, anticipating that the European Central Bank would build a ”firewall” to give eurozone governments time to repair their finances. Another national referendum looms on the horizon. Here Van Rompuy is said to be preparing his proposals, with national (Irish) officials participating in the process.

***

The markets and EU citizens need democratic and sufficient powers, good governance and transparency to the European level from Merkozy.

The governments, too, are waiting for Merkozy, but with varying apprehensions and reservations, based on their national agendas.



Ralf Grahn

EU and euro crisis: Internal weaknesses and unanimity

Some countries are born weak, some achieve weakness and some have weakness thrust upon them. The United Kingdom joined the EEC (later EU) late and grudgingly, after its EFTA strategy failed. Britain has worked hard to drag the course of European integration down to its own level, reluctantly agreeing to further steps while opting out of essential policy areas and core groups. Representing a member state seen as playing as much against as for its team, prime minister David Cameron is and has thrust himself into the position of being an obstacle, a nuisance or an irrelevance.

However, weakness is not confined to Britain. The European level is a shining example. The less than robust and democratic structures of the European Union and the eurozone are root causes of the worsening euro crisis. Given the structural weaknesses, calls for more or better leadership often have a hollow ring.

Yesterday we looked at the eurozone ”institutions” with regard to economic policy; informal gatherings with the Euro Summit as the icing on a cake of impotence.

A few days ahead of the European Council, there is no public proposal from president Herman Van Rompuy (who is also the president of the Euro Summits, and has been mandated to propose solutions). An apt illustration of the state of EU and eurozone level power, governance and transparency.

Through the feebleness of the European level, common solutions become hostages of national perspectives and power struggles, since fundamental remedies need unanimity among the EU members or participating states.

Never underestimate internal weaknesses as an explaining factor in intergovernmental Europe.

However chancellor Angela Merkel and president Nicolas Sarkozy patch up their mutual differences on Monday in Paris, the next ”comprehensive solution” requiring unanimity will be met by 25 other national lists of caveats at the European Council 8 to 9 December 2011 (somewhat fewer if the serious talks are restricted to the euro area members or a core within the core).

Does this have the look of credible structures and convincing solutions to the euro crisis, based on democracy at the right level?



Ralf Grahn

EU: Campaigning in presidential style

If not for the ambiguous word 'stunt', EurActiv's headline description ahead of the 5 to 11 September 2011 week in the European Union would been the dream of the campaign manager for the probable next president of the European Council: Van Rompuy takes lead in eurozone crisis stunt.

Herman Van Rompuy was (s)elected president of the European Council from 1 December 2009 for two and a half years, until 31 May 2012.

The term is renewable once. Van Rompuy seems to embrace the idea of a second term (RTE).

If we look at the agenda of Van Rompuy, he happens to meet members of his electoral college, 27 persons in all with a vote: the heads of state or government of the EU member states.

Very civilised campaigning, far from the 'hoi polloi'.


Update 6 September 2011 about 09:30 EET: I have noticed that Stanley Pignal on the FT Brussels blog discussed Van Rompuy's campaign in a blog post published yesterday. Recommended reading.



Ralf Grahn

Eurozone ”economic government” lost in translation?

Did the (Twin Peaks) ”economic government” for the eurozone get lost in translation?

For the blog post Eurozone: Our new ”economic government” I watched the video of the press conference at the Élysée Palace, in Paris. Based on what I heard and saw, I stated the novelty:

Both leaders describe their proposals as ”economic government” (gouvernement économique, Wirtschaftsregierung).

Since ”economic government” has been used mainly by the French, whereas others have usually spoken about ”economic governance”, I corroborated this novelty by referring to the German press release 'Deutschland und Frankreich für europäische Wirtschaftsregierung', although the link now leads to another press release headlined 'Deutschland und Frankreich für starken Euro', which seems to have airbrushed ”europäische Wirtschaftsregierung” by replacing it with ”starken Euro” (which, incidentally, is another cup of tea).

I did not see ”Wirtschafsregierung” in the text, either, so a minor act in Ministry of Truth style seems to have taken place at the German chancellor's office.


Transcripts

In the blog post Merkel and Sarkozy: Eurozone letter to Van Rompuy, I referred to the French version of the press conference text:

According to the Élysée version, president Sarkozy refers to the letter to Van Rompuy with the joint proposal for

...un véritable gouvernement économique de la zone euro. Ce gouvernement économique sera constitué du Conseil des chefs d'Etat et de gouvernement.

In the German transcript only Sarkozy's second ”gouvernement économique” is preserved as ”Wirtschaftsregierung”:

...eine wirtschaftspolitische Steuerung der Eurozone vorzusehen. Diese Wirtschaftsregierung besteht aus den Staats- und Regierungschefs.

According to the two transcripts (and part translations), chancellor Merkel does not use the term ”Wirtschaftsregierung”, so the the use of term seems to rest on the airbrushed press release.


Letter to Van Rompuy

As I noted and wondered in the blog post Merkel and Sarkozy letter: My reading, the different ”original” language versions of the joint letter to Herman Van Rompuy employ different terms.

French:

- des réunions régulières des Chefs d'État et de Governement de la zone euro : ces sommets se tiendront deux fois par an si nécessaire des sessions extraordinaires seront convoquées. Ces sommets constitueront la pierre angulaire du nouveau gouvernement économique de la zone euro.

German:

- Regelmässige Treffen der Staats- und Regierungschefs des Euro-Währungsgebiets: Diese Treffen werden zweimal pro Jahr und wenn nötig zu außerordentlichen Sitzungen einberufen und dienen als Eckpfeiler der verbesserten wirtschaftlichen Steuerung des Euro-Währungsgebiets.

English is hardly the source language, but the target language:

- Regular meetings of the euro area Heads of State and Government: these meetings will be convened twice a year and when necessary in extraordinary session to act as the cornerstone of the enhanced economic governance of the euro area.

Conclusions?

Grandiloquent to speak about ”economic government” to begin with, given the substance and lack of real democratic legitimacy of the proposals, although heads of state or government, more easily than outside observers, might perceive railroading the other EU institutions and eurozone arrangements on a permanent basis as part of their higher calling.

We have a joint letter, but which version should president Van Rompuy and the rest of us read with regard to the crucial term?

Has ”economic government” reverted to ”economic governance” outside France and the French language?

To set the record straight, could the Ministry of Truth (Berlin branch office) offer guidance?

***

On multilingual Bloggingportal.eu you find the new posts from 839 euroblogs, including on the debt and economic crises in the eurozone.



Ralf Grahn

Merkel and Sarkozy: Eurozone letter to Van Rompuy

Yesterday morning the primary sources about our new ”economic government” were limited to video of the Élysée press conference and the press release from German chancellor's office.

Since then, we have more official materials about the proposed Twin Peaks ”economic government” of the euro area. The website of president Nicolas Sarkozy has posted the text of the press conference, with chancellor Merkel's remarks translated into French.

On this page you can choose the joint letter from Merkel and Sarkozy to Herman Van Rompuy, the president of the European Council, in French, English and German, which makes the proposals available in a more finely chiseled form.

The German chancellor's office offers a report of the summit: Deutschland und Frankreich für starken Euro. There is also a shorter English version: Germany and France in favour of European economic governance.

The press conference has been transcribed and the French parts translated into German: Pressekonferenz von Bundeskanzlerin Merkel und dem französischen Staatspräsidenten Sarkozy.

The letter to Van Rompuy can be found here as well: Gemeinsamer Deutsch-Französischer Brief an EU-Ratspräsident Herman Van Rompuy.

The same page offers links to the letter in English and French.

***

Yesterday I wrote three blog entries about the the summit between Merkel and Sarkozy, including interesting media reports and comments: Eurozone: Our new ”economic government”, Eurozone Twin Peaks ”economic government” in media and Eurobonds and eurozone reform rebound despite Merkel-Sarkozy summit.



Ralf Grahn

Eurozone powers and limits (Updated)

Admittedly, the decisions by the governments of Italy and Spain and the the consequent interventions by the European Central Bank in the secondary bond markets brought relief to these Mediterranean countries. The president of the European Council welcomed the decisions:

Herman Van Rompuy, President of the European Council, welcomes the decisions taken to strengthen fiscal discipline and growth; Brussels, 8 August 2011 (EUCO 58/11)

However, stock markets generally and on Wall Street plunged on Monday (Deutsche Welle), and Asian stocks continued tumbling on Tuesday (BBC News).

Thus, the global outlook has taken a turn for the worse.


Eurozone

Reiterating the need for speedy adoption and implementation by the euro area member states of the decisions of the 21 July 2011 eurozone summit is not going to stop contagion in its tracks.

In a 3 August 2011 note Why Spain and Italy are under attack and how to defend them, Willem Buiter (Citigroup) discussed the need for structural reform in the product and labour markets of Spain and Italy, the shortcomings of the EFSF and the need for the ECB to intervene. Italy and Spain have reacted, the European Central Bank has acted, but the remaining flaws of the improved EFSF and ESM seem to be off limits for European politicians.

President José Manuel Barroso's letter to the heads of state or government of the eurozone countries has been suspected of bad timing (FT Brussels blog) and accused of causing the bond market plunge (BBC Business News, before update). Most of all, Barroso's letter has met with rejection from European political leaders and their spokespersons.

The European leaders have much on their plate, as they try to calm sentiments, secure passage of the agreed measures, explain complex issues to increasingly distrustful publics and to remain electable.

However, in the long run the refusal of the governments to embark on an open discussion about the political and economic fundamentals of the economic and monetary union (EMU) may end up doing more harm than good.

Only a federal solution can provide the Union with the effective tools it requires, declared the liberal leader Guy Verhofstadt.


Update 9 August 2011: Stanley Pignal on the FT Brussels blog has an entry about Otmar Issing's opinion piece in the Financial Times. Democratic legitimacy is the sine qua non for the political and fiscal union Europeans and their euro need, is my reading. Let's get talking about taking the right decisions at the right level, in a democratic manner.



Ralf Grahn

European Council Res Gestae (SGP & EU2020)

The European Council 23 to 24 June 2011 was supposed to be the grand finale of the first European Semester, spiced with the Euro Plus Pact, so what did the heads of state or government leave posterity?

The 'Res Gestae' web pages record the deeds of our secular leaders with regard to economic policy:

Committed to implementing reforms

The political leaders discussed economic policy coordination; the amendment of the European Financial Stability Facility (EFSF) and the ratification of the European Stability Mechanism (ESM) treaty; and the situation in Greece.


Economic policy coordination

What does the summary of the European Council conclusions tell us about the road towards sustainable public finances (Stability and Growth Pact, SGP) and growth-enhancing reform policies in line with the Europe 2020 strategy (EU2020)?

The leaders marked the end of the first European Semester under which the EU makes a six-monthly, simultaneous assessment of national stability and convergence programmes planned by member states.

The European Council endorsed country specific guidelines, without any watering down, and noted the determination of member states to do everything necessary to implement the Stability and Growth Pact (SCG). Targets that require additional efforts include employment, energy efficiency, R&D, poverty, and tertiary education. Member states should also give priority to ensuring a sound macroeconomic environment, restoring fiscal sustainability, correcting macroeconomic imbalances and strengthening the financial sector.

Member states are invited to take account of the guidelines when finalising their budgets for 2012, which are then decided on by the national parliaments during the autumn.

These national efforts should be supported by EU level work to enhance economic growth and job creation. In particular, the regulatory burden of SMEs should be reduced and, where appropriate, micro-enterprises should be exempted from certain future regulations, or at least subject to a lighter regime. The Commission should also provide a roadmap on the completion of the digital Single Market by 2015.

With regard to the Euro Plus Pact, the European Council concluded that the next round of commitments to a list of reforms intended to improve the fiscal strength of participants should be broader in scope, more concrete and ambitious, and should include a pragmatic coordinatinon of tax policies.

The statement seems to bear out the ”stronger sense of common responsibility”, noted by president Herman Van Rompuy, although the press release did not bother to specify which country-specific guidelines the European Council endorsed ”without any watering down”.

Usually, one or more working groups, presidency papers, Coreper meetings and Council configurations intervene between Commission recommendations and summit conclusions.


European Council conclusions

How about the Stability or Convergence Programme and the National Reform Programme (NRP) of each EU member state?

Our next step is to take a closer look at the detailed summit conclusions (available in 23 official EU languages):

European Council 23/24 June 2011: Conclusions (EUCO 23/11; 16 pages)

In paragraph 2, the European Council called the assessment provided by the Commission ”a good starting point”, but this time it does not look like an exercise in the use of weasel words, because ”additional efforts” are needed to attain some of the headline targets and goals of the Europe 2020 Strategy for jobs and sustainable growth.

The European Council specified that it endorsed the country-specific recommendations as approved by the Council (paragraph 3).

The conclusions proceed to outline coming measures to promote economic growth and job creation, as well as the next round of commitments under the Euro Plus Pact. Even the conclusion of the Doha Development Round was paid ritualistic observance.

To be continued on a few blogs near you.



Ralf Grahn


P.S. The Commission doesn't understand politics, wrote Ronny Patz on Polscieu (Ideas on Europe). The blog post has generated some interesting comments.

Which straitjacket and life jacket for Eurozone Greece?

Yesterday, I collected a few of my blog posts regarding the eurozone crisis and the issue of transparency on Grahnlaw Suomi Finland. The text is in Swedish, but most of the posts and some references are in English: EU-institutionerna mellan stumhet, PR och genuin öppenhet (Portugal och Grekland). (For the rest, you can try Google translation.)

While I am worried that the lack of quality information from the EU institutions is like a gift to demagogues and populists in the weak eurozone countries as well as in the stronger ones, the president of the European Council had taken a different tack the previous day. According to EurActiv, Herman Van Rompuy maintained that the messages given out are part of the problem, not a part of the solution: Special report: Van Rompuy warns leaders not to panic markets (20 May 2011).

As we have noted, credible and up-to-date information from the EU institutions about Greece is especially scarce. Not a word in the Ecofin conclusions on Tuesday.

Regardless of conflicting messages and Van Rompuy's admonishing words the markets follow their own instincts and reasoning.


Greece downgraded

On the Brussels blog (Financial Times), Joshua Chaffin notes that the credit rating agency Fitch Friday downgraded Greece's long term debt by one notch to B+, with a negative outlook. ”Soft” or not, the rating agency takes a dim view of any debt restructuring: Fitch joins chorus for another Greece bailout (20 May 2011).

However, Reuters speaks about a cut by three notches, but records the same B+: Fitch cuts Greek rating, warns over restructuring (20 May 2011).

According to Wikipedia, Fitch's credit rating B+ is in the category Non-investment grade, highly speculative. Three notches below the March rating BB+, Greece is now in the company of Zambia.

Le Monde makes the three-notch drop explicit, by mentioning both the previous BB+ and the new B+ grade: L'agence Fitch dégrade de trois crans la note de la Grèce (20 May 2011).

Bloomberg tells us that the yield on the Greek 10-year bonds rose to 16.6 percent: Fitch Cuts Greece to B+, Says Maturity Extension Is Default (20 May 2011). It is even clearer than before that Greece is outside commercial debt financing of its huge government deficits.

The next moves have to come from the government and society of Greece, followed by the conclusions of the EU-IMF mission, but we still have to wait for guarantees that the EU, including the ECB and the member states, will deliver a combination straitjacket and life jacket able to avoid financial meltdown.



Ralf Grahn

Herman Van Rompuy: Great Expectations

Herman Van Rompuy initiated a channel to EU citizen (bloggers) by launching 'Ask your question!' on Facebook. However, a few days after Europe Day 9 May 2011 most of the questions are still unanswered and the few recorded replies can hardly be described as illuminating, although new comments may still appear.

Until then, instead of the 'Great Expectations' drummed up – and then deceived – the questions by the participants and their reactions remain the most valuable part. (Remember to scroll down to older posts, until the end.)

The rickety institutional framework of the eurozone and the continuing appearance of new salvage operations erode trust in leaders wedded to 'dark secrets'.

Mainly written by pro-EU bloggers, posts marked 'eurozone' and 'myeurope' on Bloggingportal.eu tell us something about the need for 'comprehensive reform', way beyond failed PR exercises and official optimism.

The European Union needs to become real, trustworthy and comprehensible in the eyes of its citizens.


Update 14 May 2011: Read the EurActiv article 'EU leaders played poker with the euro and lost, says Borrell' (13 May 2011).



Ralf Grahn

Franco-German competitiveness pact: Transparently yours

No specific proposals for the Franco-German competitiveness pact were put forward at the European Council 4 February 2011. They were presented earlier, in Berlin, if we believe the media reports.

My latest blog posts, European Council: Pangloss meets Candide, continued (10 February 2011) and (in Swedish) Sverige i EU och Europeiska rådet (12 February 2011) left me with many unanswered questions about the Franco-German initiative regarding the Eurozone.

Let us give transparency and good governance a fair shot by looking first at the official materials.


European Council conclusions

The conclusions from the European Council are available in 23 EU languages, and we turn to the English version:

European Council 4 February 2011: Conclusions; document EUCO 2/11; 15 pages

After the strategic challenges of energy and innovation, the conclusions turned to the economic situation on page 10 (paragraphs 26 to 31), promising decisions at the March European Council meeting.

Annex I is a statement by the heads of state or government of the euro area and the EU institutions (pages 12-13), but no Franco-German plan is presented or openly discussed, despite muddled language about further steps to improve competitiveness (last paragraph).

The following part of the conclusions from the European Council is the treaty based report by the president Herman Van Rompuy to the European Parliament (PCE 30/11; 8 February 2011). Egypt and the Mediterranean region are followed by remarks about the ”long term structural challenges”, energy and innovation. About halfway into the second page, Van Rompuy turned to the economic situation, but did his outline of the comprehensive package on 24 and 25 March 2011 present the plans of France and Germany?

No specific proposals were put forward at the European Council, said Van Rompuy, but he offered some hints regarding the way forward (page 3):

The Heads of State or Government of the 17 Eurozone countries also discussed how to achieve a stronger economic convergence, by working closer together in national policies increasing competitiveness. Instead of only looking at the outcome (for instance the annual deficit), one could also look at the policies upstream of the outcome. That is something new. A common currency requires more common policies.

I welcome the fact that Member States of the Eurozone feel a stronger need for economic coordination beyond the macro-economic surveillance which we decided in the Task Force Report, which already opens new avenues.

Now our political commitment has to be translated in practical terms: what areas, which tools, what limits? To examine that, I was given a mandate to consult all Heads of State or Government of the Eurozone, and report back, identifying concrete ways forward in line with the Treaty, between now and March, and in close cooperation with the President of the Commission. We will also involve the leaders of the interested non-euro countries. The heads of state and government of the Eurozone will discuss this report in the middle of March.

No specific proposals were put forward at the European Council last week. And, as I said in London three weeks ago: "Economic policy coordination is not about uniformity - our points of departure are often different - but we must pull in the same direction."

I am convinced that we will find yet more agreement on the way forward between now and March.

Spiegel International

What do we know about the un-specific or un-forwarded German and French proposals?

Well before the EU summit, Spiegel International reported that the ”competitiveness pact” was ready, but there was still discussion about how to make Merkel's plan a reality, in the long but highly interesting article: An Economic Government for the Euro Zone? Merkel's Plan Could Transform the European Union (31 January 2011).

In the second part of the article, Der Spiegel quotes extensively from a plan written at the German Chancellery, with outlines of the coordinated tax, wage and social policies that the national states in the eurozone would have to agree to. The article pointed out the problem of sanctions, where earlier weaknesses have led to disappointing outcomes (Stability and Growth Pact, Lisbon Strategy). Der Spiegel expected experts in the European capitals to examine the proposals from Berlin during the coming days.

In the third part, Spiegel Online calls it wishful thinking to imagine that peer pressure would guarantee success for the competitiveness pact. Some of the targets and time-frames are unrealistic, but in the end there might be even more resistance in Berlin than in Brussels. For good measure, the article throws in long-standing and apparently unresolved differences in approach between Germany and France regarding economic government.


Summit reporting

President Nicolas Sarkozy described the pact for competitiveness as a ”structural plan” to respond to the challenges faced by Europe, according to The Wall Street Journal (via Dow Jones): Merkel, Sarkozy Want Euro Zone Competitiveness Pact In March (4 February 2011).

Germany and France will set out proposals for tighter economic and fiscal coordination, reported Deutsche Welle from the summit. Germany is determined to secure stricter budgetary commitments from other euro zone member states in exchange for agreeing amendments to the EFSF. The article Merkel and Sarkozy propose tighter coordination in euro group (4 February 2011) offered vague outlines of the proposals:

In their proposals for economic coordination, France and Germany will lay out plans for stricter fiscal discipline, including the idea of a "debt brake" that would establish a constitutional limit on deficits, and calls for more regular euro zone summits to better coordinate economic management.

”We want to increase our competitiveness and grow closer together within the Eurogroup and also invite other countries to take part," Merkel said.

Germany's ideas also include raising the pensionable age depending on a country's demographics, limiting wage increases, and agreeing a common tax base for corporations.

However, in Merkel, in Reversal, Urges Rescue of Euro, already before the summit The New York Times had this to say about the contents and transparency (3 February 2011):

In Berlin, Mrs. Merkel’s adviser, Uwe Corsepius, briefed European Union ambassadors on the ideas this week and a draft document, prepared by one German ministry and circulating in Brussels, identified six priorities.

These are: abolition of wage indexation systems, agreement on mutual recognition of education qualifications, creation of a common base for assessing corporate tax, adjustment of the pension systems, establishment of a national crisis management regime for banks and new legal measures to force countries to commit to tough fiscal policies through a “debt alert mechanism.”

Under the plan, countries will be measured against economic indicators, their progress verified by the European Commission.

According to the World from Berlin, in Spiegel Online International, together with French president Nicolas Sarkozy, chancellor Angela Merkel presented her plan for saving the common currency at a meeting of European Union leaders in Brussels, in a closed-door lunch session: 'Europe Doesn't Need More Germany' (4 February 2011).


Not specific, not presented?

Are you confused? If no specific proposals for the Franco-German competitiveness pact were put forward at the European Council 4 February 2011, they seem to have been presented to the EU member states some days earlier in Berlin, if we believe the media reports.

However, in these intergovernmental spheres, taking decisions as openly as possible and as closely as possible to the citizen of the European Union seems to have been completely forgotten, as have the benefits of public deliberation of known proposals as a keystone of democratic governance.



Ralf Grahn



P.S. Written in French by Nicolas Gros-Verheyde, Bruxelles2 is dedicated to the foreign, security and defence policies of the European Union. B2 is one of the ”must read” blogs for people interested in European affairs.

P.S. 2: On my Euroblogs I want to discuss legal and political issues relevant to European enterprises, jobs, employers and employees, consumers and citizens, especially in cross-border situations.

The guidelines emanating (or not) from the European Council at the top are indispensable, but details of internal market reform (Single Market Act) and the Europe 2020 strategy (EU2020 flagship initiatives) are going to be among the recurring themes.

Hopefully my blogs succeed in educating and guiding readers towards relevant sources. For me the blogs offer disciplined study as basic training and continuous updating for my teaching and legal counseling activities.

My blogs are: upstream Grahnlaw (in English), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish), as well as usually downstream the trilingual Grahnlaw Suomi Finland (later, with more sediment).

If you are interested in European business, politics or law, we can get acquainted through Twitter @RalfGrahn or Facebook.

European Council Act Two: Pangloss meets Candide

This was the outcome of Act One.

The latest European Council conclusions are available in all 23 official EU languages.

The conclusions in English:

Conclusions of the European Council (4 February 2011) (document EUCO 2/11; 15 pages)


Act Two

Whereas the real decision makers tend to hide their differences by saying nothing or by fuzzy language, the second act is played out in public, for the enlightenment and entertainment of the spectators.

According to Article 15(6) TEU, the president of the European Council shall present a report to the European Parliament after each meeting. With a few days for the president to sort out the impressions, here is what the MEPs were served regarding Egypt and the Euro-Mediterranean region, energy, innovation and improving economic governance (financial stability in theEurozone):

Speech by Herman VAN ROMPUY President of the European Council at the European Parliament; 8 February 2011 (3 pages)

The press service of the European Parliament offers a summary of the discussion as a whole, with leaders appearing according to group size: MEPs question President Herman Van Rompuy on the outcome of the EU summit (8 February 2011).

EUbusiness tells us that the plans of France andGermany for the Euro area discipline have not received universal acclaim: Euro-MPs slam Franco-German eurozone 'pact' (8 February 2011).

Valentina Pop of EUobserver writes in the same vein: MEPs vent fury at Van Rompuy over Franco-German economic plan (8 February 2011).


Dichotomy

The official information oscillates between good news and nothing to report (Pangloss), whereas MEPs and media are drawn towards what is brewing behind the scenes (Candide).

If the German and French governments have plans for stricter fiscal discipline in the Eurozone, they seem to have earned their share of criticism for failing to inform other member states, europarliamentarians and EU citizens in a timely and open manner.



Ralf Grahn



P.S. Greek debt and the ”grand bargain” is the latest post on the Brusselsblog (Financial Times), one of the ”must read” blogs in the Euroblogosphere.

P.S. 2: On my Euroblogs I want to discuss legal and political issues relevant to European enterprises, jobs, employers and employees, consumers and citizens, especially in cross-border situations. Details of internal market reform (Single Market Act) and the Europe 2020 strategy (EU2020 flagship initiatives) are going to be among the recurring themes. Hopefully my blogs succeed in educating and guiding readers towards relevant sources. For me the blogs offer disciplined study as basic training for my teaching and legal counseling activities. My blogs are: upstream Grahnlaw (in English), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish), as well as usually downstream the trilingual Grahnlaw Suomi Finland. If you are interested in European business, politics or law, we can get acquainted through Twitter @RalfGrahn or Facebook.

Immaculate conception of the European Council 4 February 2011

Ahead of the European Council ”summit” on Friday, 4 February 2011, we looked at the preparatory General Affairs Council (GAC) in the blog post: An energetic and innovative European Council? (29 January 2011).

Yesterday the foreign ministers and the ministers for Europe representing the EU member states laboured to bring us the following conclusions, currently available only in English:

3064th Council meeting General Affairs; Brussels, 31 January 2011 (asiakirja 5640/11)

(I have published some general GAC remarks in Finnish.)


Ensuring follow-up

According to Article 16(6) of the Treaty on European Union (TEU), the General Affairs Council shall ensure the follow-up of meetings of the meetings of the European Council...

Yesterday's GAC left us with this memorable, elegant and enlightening sentence concerning the follow-up to the December 2010 meeting (page 8):

The Council took stock of the follow-up being given to the European Council's meeting on 16 and 17 December.

No need to burden the public with any explanations, clarifications, document references or links to relevant documents.

St Matthew knew: Neither cast ye your pearls before swine.

***

Just in passing, let it be known that the Council has provided us with an additional opportunity to ascertain the decisions to be followed in the first place. They have published, in English:

The European Council in 2010 (about 46 pages)

In the introductory part, president Herman Van Rompuy discusses the work of the European Council in 2010. The second part contains the conclusions of the six meetings in 2010, all conveniently in one place. The conclusions of the December meeting duly begin on page 42 for us to read.

The publication is available in Dutch, French and German as well.

Readers of other languages still find the conclusions on the web pages of the (European) Council, as before.


Preparation

Coordination and preparation are the GAC tasks indicated first in Article 16(6) TEU, so let us turn to the preparatory contribution yesterday: Preparation of the February meeting.

The first sentence of the conclusions of the General Affairs Council admirably bring us 'in medias res' (page 8):

The Council examined the draft conclusions for the European Council meeting to be held in Brussels on 4 February.

If we fast-forward to the concluding sentence, leaving out the chaff in between, we may marvel at:

Revised draft conclusions will be submitted to the European Council.

Despite drawing inspiration from the cultural, religious and humanist inheritance of Europe, this is probably as close as you ever get to the miracle of transubstantiation or the immaculate conception in temporal affairs. Miraculously the immaterial draft conclusions turn into revised draft conclusions, unseen by the 'profanum vulgus', untouched by any agent.

Never mind that you would expect the proposals going in to the most important official institution of the European Union to be public knowledge and openly discussed well before the decisions, even guidelines, affecting 501 million people are taken.

Evidently, good governance does not start at the top.

As long as the European Council acts like a summit, the General Affairs Council remains a joke.



Ralf Grahn



P.S. Blenderlaw is the enjoyable legal blog with a transnational twist, written by Caronline Bradley.


P.S. 2: I am happy if you want to read my Euroblogs. The internal market and the Europe 2020 strategy (EU2020 flagship initiatives) are going to be among the main themes, upstream on Grahnlaw (in English), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish), as well as downstream on the trilingual Grahnlaw Suomi Finland. We can get acquainted on Facebook and on Twitter @RalfGrahn, too.

Herman Van Rompuy: ”The Internal Market is the EU's biggest asset”

In his closing speech at the Annual Brussels Think Tank Meeting ”Europe 3.0: Building a Viable Union” 25 January 2011, the president of the European Council, Herman Van Rompuy @euHvR on Twitter, spoke at length about the economic challenges, particularly with regard to the eurozone. His assessment of challenges, difficulties, achievement and reasonable expectations are well worth reading (page 1-4), as are his remarks about the EU on the international scene (page 4-5). However, I am going to quote Van Rompuy on the internal market, which he called the biggest asset of the European Union (page 4):

I have spoken at length about the Euro, but let us not forget the EU’s other great achievement: the Internal Market. Safeguarding and developing it may be less spectacular, but it is an indispensable day to day work.

The Internal Market is the EU’s biggest asset. Firstly, it is a major source of growth and job creation. That’s why next week the European Council will discuss Innovation and the Energy Market. We will also ask the Commission to set clear priorities amongst the measures proposed in the, rightly ambitious, Single Market Act. Secondly, the Internal Market is the EU’s main leverage towards the outside world. Last year, it helped us to stimulate Russia on its path of modernisation. In the first semester of 2011, we will probably conclude an impressive trade deal with India, as we did some months ago with South Korea. Thirdly, the internal market ties our economies and societies closer together almost every day. This is no accident. It was the brilliant intuition of the European founders, like Jean Monnet. (As he famously said: “L’Europe ne se fera pas d’un coup, ni dans une construction d’ensemble, elle se fera par des réalisations concrètes créant d’abord une solidarité de fait.”)

In that sense, the Internal Market does exactly what the title of today’s event asks for: it makes the Union more viable almost every week. For instance, on 21 December 2010 – four days after the last European Council decided in the limelight on the text of a limited Treaty change to safeguard the Eurozone –, the Council and the European Parliament agreed on three dossiers: patients’ rights, CO2 emissions from light vehicles and falsified medicines.

None of these decisions was glamorous or médiatique. Nor are the roots of a great oak tree… Yet they are fundamental for the strength of the whole.

On the European Council website there is a short note on the items to be discussed at the next meeting, 4 February 2011 in Brussels.



Ralf Grahn



P.S. Wherever there are troubles in the eurozone, you can expect A Fistful of Euros to be there with facts and opinion, as in the case of Ireland. One of the must read Euroblogs.


P.S. 2: You can follow me on Facebook and on Twitter @RalfGrahn, in addition to my blogs: Grahnlaw (in English), Grahnblawg (in Swedish) and Eurooppaoikeus (in Finnish), as well as the trilingual Grahnlaw Suomi Finland.

A busy week in the European Union: European Council only part of it

It was a busy week in the European Union. The heads of state or government were in the limelight, because the summits or meetings of the institution called the European Council are at the centre of media attention, although a fair amount of the reporting in national media has been through the prism of domestic politics. (Nowhere is this clearer than in the United Kingdom, with perpetual political and media pressure to leave no veto unused.)

It might be a good idea to let the dust settle and to look at what we have at the European level. The customary mainstream documents are the conclusions and the explanation given by the president:

European Council 28-29 October 2010 conclusions (EUCO 25/10)

Remarks by Herman Van Rompuy, President of the European Council, at the press conference following the meeting of Heads of State or Government (Brussels, 29 October 2010 PCE 251/10)


Where is the beef?

The general endorsement of the Task force on economic governance sets a few signposts on the road forward, but the summary on first two pages of the European Council conclusions relies heavily on the sources, the Task force report, a helpful factsheet and the proposals made by the European Commission:

Strengthening economic governance in the EU – Report of the Task force to the European Council (21 October 2010; 17 pages)

Factsheet on the surveillance procedures in the EU (21 October 2010; 3 pages)

Package of Commission proposals on EU economic governance [DG Ecfin 29 September 2010]

The official conclusions from the European Council are, as we can see, only the tip of the iceberg: two pages above the surface, but a reading marathon below.


Mundane tasks

We can see the “tip of the iceberg” from another angle as well. Much of what the European Union does consists of important but mundane tasks, bundled under ‘union policies and internal actions’ in Part Three of the Treaty on the Functioning of the European Union (TFEU).

While the summit stole the media limelight, last week the Commission churned out a number of relevant documents. These underreported reports and proposals concerned, inter alia, the Single Market Act, EU citizenship, a new industrial policy and the Commission Work Programme for 2011 (CWP 2011).




Ralf Grahn


P.S. There is a new kid (in a politico-zoological sense as well) on the French block of the multilingual Euroblog aggregator Bloggingportal.eu (which has grown to 687 blogs related to European affairs). The blog or web magazine Europe – 27etc has made its appearance. The slogan of the blog collective is: “Parce que l’Europe n’est pas une affaire étrangère”. There are six regular contributors (“les Cabris de l’Europe”, in a historic reference to the nationalist president de Gaulle; they write under pseudonyms, to guarantee freedom of expression), and nineteen guest writers have already signed up. Impressive start!